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In 2005, Daniel Bernardo, a newly minted art history graduate, decided to start his post-college life in Williamsburg, Brooklyn. He was lucky enough to find an affordable loft apartment above a skateboard shop with four other housemates who were all busy pursuing their dreams: one owned the shop below, two were artists, and the other was an aspiring fashion designer.

Bernardo took a stab at starting a business selling handmade shoes. Tourists (or Manhattanites) who strayed into his neighborhood certainly considered the community somewhat eccentric; Bernardo, for instance, was rocking a Dali mustache.

"We were all heavily influenced by the ethics of the punk scene, which was about going against the norm," he recalls. "I wore vintage vests, ties, and suspenders, partly because I liked them, but partly because it was what I could afford at the time. Some of my friends were into the skater look, wearing old band t-shirts and cutoff jeans, others wore flannel and had beards."

After moving to the neighborhood, Bernardo began to notice something odd: the offbeat outfits he and his friends were wearing started appearing on the racks of chain stores. You could pop into Urban Outfitters to buy a faded T-shirt from an obscure band, a pocket watch, and Victorian pinstripe trousers. You could walk out of American Apparel with a leotard and '80s spandex shorts.

This aesthetic was labeled "hipster" and could be bought straight off the shelf. Bernardo was mystified: "Our outfits were all about being true to ourselves and not spending too much money on clothes, but suddenly you could pick up an outfit that looked vintage but that had never been worn before."

By 2006, American Apparel's hipster-centric aesthetic became so popular that the company was snapped up for $382.5 million by an investment firm, who promptly took it public. That year Pabst Blue Ribbon beer, once described as the "nectar of the hipster gods," overtook Coors in volume sales. Meanwhile, Urban Outfitters saw a 44% increase in profits every year between 2003 and 2006.

Before long, so-called hipster looks started showing up at big-box retailers. You could buy skinny jeans, ironic tees, and beanies from Target, along with toilet paper and washing detergent—you could even buy a fixed gear bike from Walmart for $150. "Suddenly, trying to look different became mainstream, which was hard to wrap our minds around," says Dylan Leavitt, star of Dylan’s Vintage Minute.

A decade later, the tide has turned. American Apparel hasn't posted a profit since 2009 and has in fact hemorrhaged so much money that it was nearly delisted from the New York Stock Exchange. Pabst was just sold to a Russian beverage company in a move widely interpreted as a sign that the beer is losing its appeal. Urban Outfitters sales have steadily declined since 2011. What went wrong? Did these companies fail to anticipate the next "hipster trend?" Or has the hipster era finally come to an end, rendering these kinds of companies irrelevant?

"They have not successfully evolved to meet the needs of the new wave that cares about authenticity."

"This is the conversation I have almost every weekend," says Katharine Brandes, the LA-based creative director of women’s fashion label BB Dakota. "My friends and I sometimes like to observe hipsters in their natural habitat, which around here is Silver Lake." Brandes, 28, grew up surrounded by the hipster-gone-mainstream aesthetic. Her theory is that these brands haven't been perceptive to how youth culture has changed over the last decade.

The earliest hipsters, she argues, generally rejected mainstream fashion and beliefs. In later years, however, hipster culture became more about a particular ethical lifestyle. "Urban Outfitters and American Apparel did a good job of commodifying the earliest kind of hipster—the Vice-reading, PBR-swilling, trucker-hat-wearing twentysomething," she says. "But they have not successfully evolved to meet the needs of the new wave that cares about authenticity and buys products from brands that have a strong ethical core."

To understand why Urban Outfitters and American Apparel have declined so spectacularly, it's helpful to remember what it was that made them so successful in the first place. In their heyday, each made a science of identifying exactly what it was that made hipsters so attractive, then recreated that aesthetic in their stores.

"Each made a science of identifying exactly what it was that made hipsters so attractive."

They mass-marketed the counterculture by honoring art, music, and fashion of the past; rejecting traditional lifestyles and careers; and appreciating irony. "You would flip through one of their lookbooks or walk into their stores and think, I am in this world," Brandes recalls. They made a hard-to-define bohemian lifestyle accessible to an entire generation of young people growing up in the cookie-cutter suburbs.

Urban Outfitters and American Apparel identified their target audiences, moving into neighborhoods with a high density of 18 to 25 year olds who were beginning to experiment with their personal style and values. In college towns, students looking to express their newfound interest in indie rock or '80s nostalgia could put together an entire look in a matter of minutes at one of these stores; they didn’t need to dig through bins of old T-shirts at Goodwill anymore. Even though you weren't technically thrift shopping, the ambiance and layout inside these stores mimicked the experience, making you feel like you were stumbling across rare, special objects.

Take a stroll through Cambridge, Massachusetts today, and you'll notice that, predictably, both Urban and American Apparel are located by the Harvard campus. At Urban, the store’s layout is meant to make the shopper feel they are in a cozy, creative loft, not unlike the one that Daniel Bernardo inhabited in Brooklyn in 2005. There's simple metal shelving, wood floors, exposed pipes running across the ceiling, and a sprinkling of accent pieces: Southwestern rugs, paper mobiles, glass chandeliers. Music fills the air—Jenny Lewis, Viet Cong, Cashmere Cat—drawn, no doubt, from the extensive vinyl record collection that can be found on the ground floor.

But it's clear that something's amiss. Outfits on display are an unfocused mix of influences, many of which constitute watered-down appropriation. There are batik rompers and Native American dreamcatchers and plaid shirts layered with Andean-style ponchos. Urban is working hard to stay edgy, but the tactics have been labeled offensive. T-shirts with phrases like "eat less" and "depression" angered mental health advocates, 21 separate objects described as "Navajo-inspired" (including a flask) resulted in a cease-and-desist letter from the attorney general of the Navajo Nation, and a seemingly blood-splattered Kent State sweatshirt angered just about everyone on the internet.

"Urban is working hard to stay edgy, but the tactics have been labeled offensive."

A few blocks away, at American Apparel, the store design is exactly as it was 10 years ago. It's reminiscent of a factory, with stark white walls covered in metal racks and harsh overhead lighting. On the walls are enormous posters that capture the 1970s porn aesthetic: a woman in a sheer triangle bra suggestively stares at the camera on her hands and knees, a woman clad in nothing but legwarmers and panties looks more demure.

American Apparel’s risqué marketing suggested a raw, empowered sexuality when it first entered the scene. Now it's inseparable from the troubling exploits of company founder Dov Charney, who was ousted last year after the board compiled a long list of strikes like sleeping with employees, walking around the factory naked, and masturbating in front of a journalist.

It's notable that Urban Outfitters and American Apparel's moral failings became more pronounced just as its target demo started developing a cohesive sense of personal principles. In recent years, hipster culture, in so much as it even still exists, has become much more about internalizing a set of ideals about how to live ethically, rather than simply rejecting everything mainstream.

"To use two stereotypes, there was a shift from the Vice hipster to the Portlandia hipster," says Brandes. "It's about being environmentally conscious, knowing where your products come from, and supporting local artisans." American Apparel once attracted customers with its sweatshop-free manufacturing, which stood in contrast to brands like Nike and Gap that made headlines for their poor factory conditions. But whatever credibility this lent the brand, it was all but erased by Charney’s disturbing behavior. Urban never had a core ideology behind it to begin with, which made it even easier for offensive merchandise to make it to retail.

"There was a shift from the Vice hipster to the Portlandia hipster."

Another reason these stores are doing so poorly? What was once considered "hipster style" has gone completely mainstream. Urban Outfitters and American Apparel are trying to sell an aesthetic that is no longer fresh and exciting. Your mom can buy herself a pair of skinny jeans at Eileen Fisher. Warby Parker has brought thick, Buddy Holly-style glasses to the masses.

"This is nothing new," says fashion consultant Eila Mell. "Throughout the last century, there was always some group that went against what the rest of society was doing and took pride in being different." She rattles off a list: the flappers, the beatniks, the hippies, the punks. These groups espoused radical social values, as well as very particular aesthetics. And in each case, these hyper-specific looks were eventually co-opted by the rest of the culture, emptying them of their original meaning.

"Once a fashion statement becomes mainstream, it alienates the original core of people that were doing it in the first place," she says. "Then what usually happens is that they react by going in the opposite direction." Dylan Leavitt agrees: "Everything happens in cycles. Every generation has its style, but then there are these 180-degree shifts that happen." Mell, Leavitt, and Brandes all agree that a reversal of hipster style is already underway.

"Once a fashion statement becomes mainstream, it alienates the original core."

"Hipsters have aged in a particular way," Brandes explains. "They’ve become more restrained and classic in their style, while still caring a lot about how clothing is made." Simple design is in, dramatically different looks are out. Last year, normcore was pretty much all anyone could talk about when it came to retail. Trendy young people in places like Williamsburg, Silver Lake, and Portland are more likely to buy cleanly-designed clothing from companies like Everlane and Reformation that are completely transparent about their manufacturing processes as opposed to out-there pieces from thrift stores.

Which brings us back to Daniel Bernardo, now 32 and living in Chicago. As Williamsburg gentrified and rents skyrocketed, he decided to seek out a new life in the Midwest. Today, he runs a clothing company called Glass House Shirtmakers that sells sustainable, American-made tailored shirts.

Unlike the outfits he used to wear in his twenties, these shirts are designed to be timeless and inconspicuous. What stands out is not the design of the pieces, but the story behind them. "Being a hipster was always a mentality, not a way of dressing," he explains. "Glass House is all about the craft of shirtmaking and being environmentally responsible. That’s not so different from wearing an analog watch instead of a digital one, or choosing records instead of CDs."